Elon Musk Needs More Cobalt - And So Do We

WESTWOOD, CA - APRIL 05: Elon Musk and Director Chris Paine attend the premiere and Q&A for 'Do You Trust This Computer?' at The Regency Village Theatre on April 5, 2018 in Westwood, California. (Photo by Alberto E. Rodriguez/Getty Images)

Despite what Elon Musk claims, the importance of the metal cobalt in the growing electric vehicle market and beyond will continue. Cobalt is a key ingredient used in the lithium-ion batteries that continue to proliferate across a variety of markets. Cobalt now sells for ~$95,000 per ton, compared to $23,000 two years ago, and surging demand for electric vehicles, jet engines, mobile phones, and laptops could lead to major shortages and even higher prices. This year alone, demand for cobalt could increase 40-50%, with use in the battery sector alone exploding 15-20 fold by 2030.

The U.S. is not a significant cobalt producer, while Congo produces the majority of the world's stock.

Cobalt has become so essential that major companies such as Apple and BMW are looking to work directly with miners. Replacing cobalt with a cheaper substitute can lead to lower performance. For example, replacing cobalt with nickel improves energy density but reduces stability, which is an critical factor in designing inherently safer, high-performing battery systems. As we've long seen with nuclear, and perhaps now with self-driving cars, bad accidents could block growth for the nascent electric vehicle revolution.

"As a consequence of the country’s inefficient permitting system, it takes on average seven to 10 years to secure the permits needed to commence operations in the U.S. To put that into perspective, in Canada and Australia, countries with similarly stringent environmental regulations, the average permitting period is two years."

Environmental groups should be fully supporting a mining boom in the U.S. to produce more cobalt and the other key resources required for our energy transition. To illustrate, a cobalt shortage will just help the internal combustion engine maintain its 110-year old grip on the automobile market (since Ford's Model T), hindering our goal for cleaner air and bluer skies.